Pluto Company operates in the travel

industry and incurs costs unevenly

throughout the financial year.
Advertising costs of 2M were incurred
on March 1, 2020 and staff bonuses
are paid at year-end based on sales.
Staff bonuses are expected to be
around 20M for the year; of that sum
3M would relate to period ending MArch
31, 2020. What costs should be Advertising Cost of
included in Pluto's QUARTERLY 2,000,000; Staff
financial report on March 31, 2020? bonuses of 3,000,000
Statement of changes
600 in shareholders equity
The following are compnents of changes
in shareholders equity forex gain
In You Co. 2013 annual report, yew
described its social awareness
expenditures during the year as follows
The company contributed 250,000 in
cash to youth's educational program 310,000
Comparative Financial statement of Parr
company follow
Advertising costs may be accrued or
deffered to provide an approriate
expense in each period for Interim
fnancial reporting Year end financial
reporting Yes , Yes
On Jan. 1, 2020, YOURS Company
acquired machinery at a cost of
3,000,000. The machinery is depreciated
on the staright line method over five
years with no residual value. Because of
a bookkeeping error, no depreciation
was recognized in the 2020 financial
statements. The overdight was
discovered during the preperation of the
2021 financial statements. What is the
depreciation expense on the machine for
2021? 600,000
According to IAS 18, revenue from
interest should be recognized using the a time proportionate
ff measurement basis basis
Taxes reduce both net
Which one of the ff statements related to income and operating
an income statement is correct? cash flow.
The ff balances have been excerpted 43,000
from Edwars' balance sheet:
Prep insurance 6k 7.5k
Interest Rec 3.7k 14.5k
.....

The insurance expense on the income

statement for 2020 was:
Holy Company has three divisions, each
of which to be reportable segment.
Common costs appropriately allocated
on the basis of each divsion's sales in
relation to Holy's aggregate sales. In
2020, sgement had 1 sales of 6M, which
was 25% of Holy's total sales and had
traceable operating costs of 3.8M. In
2020, Holy incurred operating costs of
1M that were not directly traceable to
any of those segments. WHAT
AMOUNT SHOULD BE SHOWN AS
SEGMENT 1'S OPERATING PROFIT
FOR 2020? 1,950,000
PERFECT CORP. frequently borrowa
from the bank in order to maintain
sufficient operating cash. The following
loans were at 12% interest rate,with
interest payable at maturity. Date of
Loan -- Amount -- Maturity Date -- Term
of Loan 11/1/02 -- 5,000 -- 10/31/03 -- 1
year 2/1/03 -- 15,000 -- 7/31/03 -- 6
months 5/1/03 -- 8.,000 -- 1/31/04 -- 9
months PERFECT repaid each loan on
its schedule maturity date. PERFECT
records interest expense when the loans
are paid. As a result, interest expense of
1,500 was recorded in 2020. If no
correction is made, by what amount
would 2020 interest expense be
understated? 540
At Dec. 31, 2013, JOY Co. had the
following balances in the accounts it
maintains at First State Bank: Checking
account#101 $175,000 Checking
account #201 (10,000) Money market
account 25,000 90 day certificate of
deposit, due 2/28/14 50,000 180 day
certificate of deposit, due 3/15/14 80,000
JOY classifies investments with original
maturiities of the three months or less as
cash equivalents. In its Dec 31, 2013
balance sheet, what amount should JOY
report as cash and cash equivalents? 240,000
During the financial year, Cresswell
Limited had a Cost of Sales amounting
to 260,000. Beginning and ending
balances were: Inventory 46,000; 55,000
Accounts Payable 18,000; 26,000. A
discount of 2,000 of prompt payment
was received. The amount of cash paid
for goods purchased during the year
was: 259,000
Zion co. adjusted trial balance at Dec 31,
2020, includes the ff. acct balances:
Common stock P3 par 600k
Additional paid in capital 800k
treasury stock, at cost 50k
net realized loss 20k 1,680,000
On January 1, 2020, Okay Corp.
changed its inventory method to FIFO
from LIFO for both financial and income
tax reporting purposes. The change
resulted in a 500,000 increase in the
January 1, 2020 inventory, assuming
that the income tax rat efor all years is Retained earnings
30%. The cumulative effect of the statement as a 350,000
accounting change should be reported addition to the beginning
by OKAY in its 2020 balance
On Decemebr 31,2018, Ellworth, Inc.
appropriately chaged its inventory
valuation methos to FIFO cost from
weighted-average cost for financial
statement and increase in the beginning
inventory at January 1, 2018
assume 30% income tax rate. The
change will result in a 1,500,000
increase in the beginning inventory

The cumulative effect of this accounting

change on beginning retained earning is 1,050,000
Happy Co. reported a retained earning
balance of 300k at dec. 31.2019. In
august 2020, happy determined that
insurance premiums of 60k for the three-
year period beginning jan 1, 2019 had
been paid and fully expensed in 2019.
Happy has a 30% income tax rate. what
amount should happy report as adjusted
beginning retained earnings in its 2020
statement of retained earnings? 328,000?
During 2020, Angat Company decided to
change from the FIFO method of
inventory valuation to the weighted
avearge method inventory balances
each method were: DEc. 31, 2018 FIFO:
10,000,000 Weighted Average:
7,000,000 DEc 31, 2019 FIFO:
8,000,000 WEighted Average: 7,500,000
DEce. 31, 2020 FIFO: 6,000,000
Weighted Avearge: 5,000,000 Ignoring
the income tax in its 2020 statement of
retained earnings, what amount should
Angat report as the effect of its
accounting change? 500,000
Passer Corp. owned 20,000 shares of
KO Corp. purchased in 2019 for
300,000. On december
15,2022. ...........The entry to record the
declaration of the dividend would include
a doubt to Retained Ernings of
Metro Inc. reported net income of 150k
for 2013. Changes occured in several
balance sheet accounts during 2013 as
follows:
Investment in Videogold Inc. stock
carried on the equity ... 5,500 increase
Accum dep,.... 2,100 deacrease
premium on bands pay... 1,400
decrease
deferred income.... 1,800 increase

In metro's 2013 cash flow statement, the

reported net cash provided by operaing
activties should be 144,900
For which type of material related party
transactions does statement of financial Only those not reported
accounting standard 57, Related party in the body of the
diclosures, require disclosure? financial statements.
Which of the ff are included in current
liabilities? I. note payable to a supplier II.
amount due from a customer next month
III. account payable to a supplier that is
due next week IV. loan payable to the
bank in fourteen months I and III only
If an entity's primary segment format is
geographical segments by location of Depreciation and
customers, under IAS 14 segment amortization expense,
reporting, it is required to make the by location of
following disclosures customers
At the end of 2020, HELLO Co. failed to
accrue sales commissions earned durinf
2020 but paid in 2021. What was the
Overstated, No effect
effect of this error on 2020 ending
working capital and on the 2021 ending overstated,
retained earnings balance, respectively? no effect?
Holiday pay expense
for administrative
employees is
Which of the following errors could result misclassified as
in an overstatement of both current manufacturing
assets and stockholders' equity? overhead

SET B (jack edition HAHAHAHHHAA)

1. On January 1, 2011, Bryan Co. 292,000
purchased a machine for 528,000 and
depreciated it by the straight line method
using an estimated useful life of eight
years with no salvage value. On January
1, 2014, Bryan determined that the
machine had a useful life of six years
from the date of acquisition and will have
a salvage value of 48,000. An
accounting change was made in 201 to
reflec these addtl. dat. The accumulated
depreciation for this machine should
have a balance at December 31, 2014
A degree of caution in
2. in respect to information included in the exercise of
financial statements, the accounting judgements about
concept of 'prudence' ensures that: estimates is made
3. A material loss should be presented Unusual in nature and
separately as a component of income infrequent in
from continuing operations when it is: occurrence.
4. warner limited had the ff. cash flows
during a reported period: *acquisition of
subsidiary, net of cash flows 250,000
*dividends paid 65,000 *repayment of
borrowings 90,000 *interest paid on
borrowings 57,000 * proceeds from sale
of plant 215,000 what is the amount of
the cash flows in relation to financial
activities of warner limited for the Net Cash outflow of
reporting period? 155,000
A change in accounting
principle for which the
financial statements for
5. Stone Company changed its method prior periods included for
of pricing inventories from FIFO to comparative purposes
weighted Average. What type of should be presented as
accounting change does this represent? previously reported.
6. Which of the following is accounted
for as change in accounting principle?
7. A law firm received 2,000 cash for
legal services to be rendered in the
future. The Full amount was credited to
the liability account Unearned Legal
Fees. If the legal services have been Revenues to be
rendered at the end understated
8. S 1 presentation of financial
statements, requires hat entity must
disclose the following information in its
financial statements:
9. financial statements shall include
disclosures of material transactions Sales of inventory by a
betweeen related parties except subsidiary to its parent
10. Which of the ff. presentation on the
statement of cash flows of the
transactions described is correct?
11. On January 1, 2020, Okay Corp.
changed its inventory method to FIFO
from LIFO for both financial and income
tax reporting purposes. The change
resulted in a 450,000 increase in the
January 1, 2020 inventory, assuming
that the income tax rat efor all years is
30%. The cumulative effect of the
accounting change should be reported
by OKAY in its 2020
12. On December 31,2018, Ellworth, Inc.
appropriately changed its inventory
valuation method to FIFO cost from
weighted average cost....The change will
result in a P1,500,000 increase in the
beginning inventory at January 1,2018.
Assume a 30% tax rate. The
cummulative effect of this accounting
change on beginning retained earning is
13. Presented below are certain account
of home decor company:
14. Happy Co. reported a retained
earniings balance of 400,000 at
December 31,2019. In august 2020,
Happy determined that insurance
premiums of 60,000 for the three-year
period beginning January 1,2019, had
been paid fully expensed in 2019
15. PERFECT Corp. frequently borrows
from the bank in order to maintain
sufficient operating cash. The ff were at
a 12% interest rate, with interest payable
at maturity....... 11/1/02 -- 5,000---
10/31/03-- 1 year
16. Metro Inc, reported net income of
50,000 for 2013. Changes occured in
several balance sheet accounts during
2013 as follows: * Investment on
Videogold Inc. stock, carried on the
equity basis - 5,500 increase
*Accumulated depreciation, caused by a
major repair to projection equipment -
2,100 decrease *Premium on Bonds
payable 1,400 decrease *Deferred
income tax liability (long-term) - 1,800
increase In Metro's 2013 cash flow
statement, the reported net cash
provided by operating activities should
be
17. Grum Corp., a publicly owned
corporations, is subject to the
requirements for segment reporting in its
income statement for the year ended
December 30,2013. Grum reported
revenues of 50,000,000, operating
expenses of 47,000,000 and net income
of 3,000,000. Operating expenses
include payroll costs of 15,000,000.
Grum's combined identifiable assets of
all industry segments at December
3,2013, were 40,000,000. Reported
revenues include 30,000,000 of sales to
external customers.
18 On Jan. 1, 2020, YOURS Company
acquired machinery at a cost of
3,000,000. The machinery is depreciated
on the staright line method over five
years with no residual value. Because of
a bookkeeping error, no depreciation
was recognized in the 2020 financial
statements. The overdight was
discovered during the preperation of the
2021 financial statements. What is the
depreciation expense on the machine for
2021? 600,000
19. On January 2, 2020, Air Inc. agreed
to pay its former president 300,000
under a deferred compensation
arrangement. Air should have recorded
this expense in 2019 but did not do so.
Air;s reported income tax expense would
have been 70,000 lower in 2019 had it
properly accrued this deferred
compensation. In its December 31, 2020
FS, Air should adjust the beg. balance of
its retained earnings by a
20. For which type of material related-
party transactions does Statement of
Financial Accounting Standard 57, Only those not reported
Related-party Diclosures, require in the body of the
disclosure? financial statements.
21. With respect to loans classified as
current liabilities, all of the following
events would qualify for disclosure as
non-adjusting event, except.
22. In 2013, a tornado completely
destroyed a building belonging to
Holland Corp. The building cost
100,000 and had accumulated
depreciation of 48,000 at the time of the
loss. Holland received a cash
settlement from the insurance
companyand reported an extraordinary
loss of 21,000. In Holland's 2013 cash
flow statement, the net change reported
in the cash flows from investing activities
section should be a
23
24. PASSER Corp. ownede 20,000
shares of KO Corp. purchased in 2019
for 300,000. December 15,2022,
PASSER declared a property dividend of
all of its KO Corp. shares on the basis of
one share of KO for every 10 shares of
PASSER common stock held by it's
shareholders. The property dividend was
distributed on JAnuary 15,2022. On the
declaration date, the aggregate market
price of the KO shares held by PASSER
was 400,000. The entry to record the
declaration of the dividend would include
a debit to Retained Earnings of
25. Easy Co. incurred the following
infrequent losses during 2013:
* a 300,000 loss was incurred on
disposal of one of four dissimilar
factories.
* a major currency devaluation caused a
120,000 exchange loss on an amount
remitted by a foreign customer.
26
27. Which of the following best describes
the proper accounting for interim
financial reports?
28. During 2020, INTERMEDIATE
Company discovered that the ending
inventories reported on its financial
statements were incorrect by the
following amounts: 2019 60,000
understated 2020 75,000 overstated
INTERMEDIATE uses the periodic
inventory system to ascertain year-end
quantities that are converted to dollar
amounts using the FIFO cost method.
Prior to any adjustments for these errors
and ignoring income taxes, Paul's
retained earnings at Jan 1, 2020, would
be 75,000 overstated
29. Marjo Corporation provided the
following date for 2020. Accounts
receivable 500,000; 360,000. Unpaid
merchandise invoices 200,000. Paid
suppliers of merchandise net of
discounts of 50,000 1,500,000. Paid
suppliers of merchandise prior year
150,000. How much is a total purchases
30. in 2020, Brighton Co. changed from
the individual item approach to
aggregate approach in applying the
lower of FIFO cost or market to
inventories. the cumulative effect of this
change should be reported in Brighton's
financial statements as a
31. which statement regarding accrual
basis varsus cash basis of accounting is
true?
32
33. Branzuela Corporatiom reported the
following amounts of net income for the
years ended December 31, 2018, 2019,
and 2020: 2018--- 127,000 2019---
150,000 2020--- 128,500..... During your
examination, you discover the following
errors...... What adjusting entry should
be made on December 31, 2020 to
correct the error described in item B?
34. The following items were among
those that were reported on Bulacan
Comoany's income statement for the
year ended December 31,2020: Legal
and adult fees 2,000,000 Rent for office
space 6,000,000 Interest on acceptance
payable 1,000,000
35. The tax expnse related to profit or On the face of Statement
loss of the period is required to be of Comprehensive
presented Income
36. So long as it is probable that the
economic benefits will flow to the
enterprose and the amount of the
revenue can be measured reliably,
revenu from royalties should be
recognized on Accrual Basis
37. On June 30, 2013. U-CAN Corp.
incurred a 100,000 net loss from
dissposal of a segment. ALso on June
30,2013 U-CAN paid 20,000 for property
taxes assesed for the calenday year
2013. What amount foregoing items
should be included in the determination
of UCAN net income or loss for the six
months 110,000
38. The accounts and balances shown
were taken from Basic Company trial
balance on December 31,2020. All
Adjusting entries have been made.
Wage payable 25,000; Cash 175,000;
Bonds Payble 600,000; Dividens
Payable 140,000; Prepaid REnt
136,000...... How much should be
reported inBasic's Decmber 31,2020
statement of financial position as current
and non current assets? 1,650,000 and 3,395,000
39. An example of a correction in From cash basis of
previously issued financial accounting to the accrual
statements is change basis of Acc.
40. At the end of HELLO CO. failed to
accrue.... naa sad nis taas na question Oversted, No effect
41
42
43
44
45
46
47
48
49
50

SUMPAY SA KINATAS-AN (SET A)

27. The cumulative effect of a change in
accounting principle should be recorded
separately as a component of income Completed contract
after continuing operations, when the method of accounting for
changes is from the long term...
28. Which of the ff is accounted for as a a change in inventory
change in accounting principle? valuation from average...
29. The accounts and balances shown
below were taken from Basic company
on 12/31/20. Given: 250k, 175k, 600k,
140k, 136k, 820k, 525k, 153k, 48k,
1.020M, 228k, 248k, 366k, 1.2M, 150k,
400k, 900k. How much should be
reported as current & noncurrent
assets?
30
31
32
33
A change from expensing
certain costs to
capitalizing these costs
due to a change in the
period benefited, should
be handled as a change in
34. which of the ff statement is correct? accounting estimate.
35. In 2020, brighton Co. changed from
the individual item approach to the
aggregate approach in applying the
lower of FIFO cost or market to
inventories.
36. In 2013, a tornado completely
destroyed a building belonging to
holland corp. bldg cost - 100k; AD - 48k;
Loss - 21k. Net change reported in the
cash flow should be:
37. easy co incurred the ff infrequent
losses during 2013

a 300k loss was incurred on disposal of

one...
a major currency devaluation cuased a
120k...
inventory valued at 190k...

IN its 2013 income statement, what

amount should EASY report as losses
that are not considered extraordinary?
38 on june 30, 2013 u-can corp. incurred
a 100k net loss from disposal of a
business segment. also, on june 30,
2013, u-can paid 20k for porperty
taxes...

What amnt of the foregoing items should

be included in the determination of u-
can;'s net income or loss for the six-
month interim period ended june 30,
2013?
39 during 2020, intermediate company
discovered that the ending inventories
reported...
2019 70k understated
2020 75k overstated

Intermediate uses the periodic inventory

system...

Paul's retained earnings at Jan 1, 2020

would be:
Branzuela Corp. reported the ff amounts
of the net income for the yr ended dec
31,2018

2018 127k
2019 150k
2020 128.5k
..............
what is the adjusted net income for the
year ended dec 31, 2020?
The cash basis is less
41. which statement regarding accrual useful in predicting the
basis versus cash basis of accounting is timing and amounts of
true? future cash flows
2
43
44.Information about the sources and
uses of an enterprise's cash and cash
equivalents is provided in the statement of cash flows
45. which of the ff is not a method of
disclosing pertinent info?
IAS 1. presentation of FS, requires the ff
note disclosures in relation to dividends
of an entity. The
47. Happy lang comp. keeps limited
records. It's assets and liabilities at the
beginning and end od the curret yar are
as ff:

cash in bank 30k 50k

A/R 50k 70k
merch inventory 100k 80k
a/p 40k 20k

How much is the net income/ loss for the

year?
On Jan 2, 2020, air inc agreed to pay its
former president 300k under a deffered
compensation arragement. .... Air's
reported tax expense have been 7k
lower in 2019...
Air should adjust the beginning balance
of its retained earnings by a
49 a materialloss hould be presented
separately as a component of income
from continuing operations when it is
50 In respect to incormation in financial
statements, the accounting concept of
prudence ensures that: